Sweden’s Northvolt, whose CEO Peter Carlsson used to work for Tesla, is racing against rivals such as South Korea’s LG Chem to set up large-scale battery cell plants across Europe, where automakers and industrial firms have so far been largely reliant on Asian imports.

European automakers such as BMW, Daimler , Volkswagen and Volvo Car Group are all set to ramp up electric car production in the coming years.

Northvolt and Scania said on Thursday they had agreed to develop and commercialise battery cell technology for heavy commercial vehicles with Scania’s investment going toward building Northvolt’s planned demo line and research facility.

They have also struck a deal over future purchases of battery cells, they said in a joint statement.

Northvolt’s Carlsson wants the Swedish plant to rival U.S. electric carmaker Tesla’s Gigafactory in the Nevada desert, targeting annual production equal to 32 gigawatt-hours by 2023.

Last year Northvolt signed partnership deals with Swiss engineering group ABB and Danish wind turbine maker Vestas, but still needs to raise the vast majority of the financing required for the plant. ($1 = 0.8063 euros) (Reporting by Niklas Pollard; editing by Alexander Smith)